Answered: Indicate the combined effect of the…

Name: For the year ending August 31, 2016, Mammalia Medical Co. mistakenly o
Uploaded: 2024-03-05T11:47:04.000Z
Channel: Bartleby
Description: For the year ending August 31, 2016, Mammalia Medical Co. mistakenly omitted adjustingentries for (1) depreciation of $5,800, (2) fees earned that were not billed of $44,500, and (3)accrued wages of $7,300. Indicate the combined effect of the errors

Business

Accounting

Indicate the combined effect of the errors on (a) revenues, (b) expenses, and (c) net income for the year ended August 31, 2016.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 10P: At the beginning of 2020, Tanham Company discovered the following errors made in the preceding 2...

See similar textbooks

Similar questions

Shannon Corporation began operations on January 1, 2019. Financial statements for the years ended December 31, 2019 and 2020, contained the following errors: In addition, on December 31, 2020, fully depreciated machinery was sold for 10,800 cash, but the sale was not recorded until 2021. There were no other errors during 2019 or 2020, and no corrections have been made for any of the errors. Refer to the information for Shannon Corporation above. Ignoring income taxes, what is the total effect of the errors on the amount of working capital (current assets minus current liabilities) at December 31, 2020? a. working capital overstated by 4,200 b. working capital understated by 5,800 c. working capital understated by 6,000 d. working capital understated by 9,800
At the beginning of 2020, Tanham Company discovered the following errors made in the preceding 2 years: Reported net income was 27,000 in 2018 and 35,000 in 2019. The allowance for doubtful accounts had a zero balance at the beginning of 2018. No accounts were written off during 2018 or 2019. Ignore income taxes. Required: 1. What is the correct net income for 2018 and 2019? 2. Prepare the adjusting journal entry in 2020 to correct the errors.
A review of Anderson Corporations books indicates that the errors and omissions pertaining to the balance sheet accounts shown as follows had not been corrected during the applicable years. The net income per the books is: 2017, 10,000; 2018, 12,000; 2019, 15,000; and 2020, 20,000. No dividends were declared during these years and no adjustments were made to retained earnings. The Retained Earnings balance on December 31, 2020, is 50,000. Omissions Required: Determine the correct net income for the years 2017, 2018, 2019, and 2020, and the adjusted balance sheet accounts as of December 31, 2020. Ignore possible income tax effects.
Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. Reece Financial Services Co.s accounting clerk prepared the following unadjusted trial balance at July 31, 2016: The data needed to determine year-end adjustments are as follows: a. Depreciation of building for the year, 6,400. b. Depreciation of equipment for the year, 2,800. c. Accrued salaries and wages at July 31, 900. d. Unexpired insurance at July 31, 1,500. e. Fees earned but unbilled on July 31, 10,200. f. Supplies on hand at July 31, 615. g. Rent unearned at July 31, 300. Instructions 1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation ExpenseBuilding; Depreciation ExpenseEquipment; and Supplies Expense. 2. Determine the balances of the accounts affected by the adjusting entries and preparean adjusted trial balance.
In 2018, Winslow International, Inc.’s controller discovered that ending inventories for 2016 and 2017 were overstated by $270,000 and $570,000, respectively.Determine the effect of the errors on retained earnings at January 1, 2018. (Ignore income taxes.)
For this example, Zion Corporation discovers the following errors in January 2017 relating to 2016 accounting transactions. The books for the 12 months ending December 31, 2016, are still open. All years prior to January 1, 2016, are closed: 1- A math mistake was made, and depreciation expense is understated by $35,000 for 2016. 2- Zion failed to recognize and accrue salaries payable of $3,000 on 12/31/16. 3- Zion shipped an order to a customer on 12/26/16 for $4,500, but did not record it on the books yet. The sale was on account and the cost of this order to Zion was $2,875. 4- Zion further notices that depreciation expense for years prior to January 1, 2016, is understated by an additional $50,000 5- Cash Payment for Furniture $77 debited to Cash account and credited to Furniture account on 12/14/16. 6- A check for a utility bill (paid with cash) for $146 was incorrectly recorded in the journal as $164 on 12/3/16. 7 -A shipment of…
In 2016, Winslow International, Inc.’s controller discovered that ending inventories for 2014 and 2015 were overstated by $200,000 and $500,000, respectively. Determine the effect of the errors on retained earnings at January 1, 2016. (Ignore income taxes.)
On December 31, 2018, Alan and Company prepared an income statement and balance sheet but failed to take into account four adjusting journal entries. The income statement, prepared on this incorrect basis, reported income before income tax of $26,000. The balance sheet (before the effect of income taxes) reflected total assets, $82,000; total liabilities, $36,000; and stockholders’ equity, $46,000. The data for the four adjusting journal entries follow:Effect of Amortization of $7,200 for the year on software was not recorded.Salaries and Wages amounting to $16,200 for the last three days of December 2018 were not paid and not recorded (the next payroll will be on January 10, 2019).Rent revenue of $3,600 was collected on December 1, 2018, for office space for the three-month period December 1, 2018, to February 28, 2019. The $3,600 was credited in full to Deferred Revenue when collected.Income taxes were not recorded and not paid. The income tax rate for the company is 30%.Complete the…
The accountant of Reliable Consulting, Inc. failed to make an adjusting entry to record $6,000 for unearned service revenues that were earned before the end of the fiscal year. Assume the company initially recorded a liability. Which of the following statements is true? A. The total liabilities will be overstated. B. The total liabilities will be understated. C. The total assets will be overstated. D. The total assets will be understated.
Below are three independent and unrelated errors. On December 31, 2017, Wolfe-Bache Corporation failed to accrue office supplies expense of $1,850. In January 2018, when it received the bill from its supplier, Wolfe-Bache made the following entry: Office supplies expense 1,850 Cash 1,850 On the last day of 2017, Midwest Importers received a $91,000 prepayment from a tenant for 2018 rent of a building. Midwest recorded the receipt as rent revenue. At the end of 2017, Dinkins-Lowery Corporation failed to accrue interest of $8,100 on a note receivable. At the beginning of 2018, when the company received the cash, it was recorded as interest revenue. Required:For each error:1. What would be the effect of each error on the income statement and the balance sheet in the 2017 financial statements?2. Prepare any journal entries each company should record in 2018 to correct the errors.
Records showed that as of December 31, 2020, accrued salaries payable of P21,000 were not recorded in Company’s books. In addition, office supplies on hand of P9,000 at December 31, 2020 were erroneously treated as expense instead of supplies inventory. Neither of these errors was discovered nor corrected. What is the effect of these two errors? A. 2020 net income and December 31, 2020 accumulated profits are understated by P9,000 each. B. 2019 net income is overstated by P12,000 and 2020 net income is understated by P9,000 C. 2019 net income and December 31, 2019 accumulated profits are understated by P21,000 each. D. 2020 net income is understated by P30,000 and January 1, 2021 accumulated profits is understated by P9,000
Below are three independent and unrelated errors. a. On December 31, 2015, Wolfe-Bache Corporation failed to accrue office supplies expense of $1,800. In January 2016, when it received the bill from its supplier, Wolfe-Bache made the following entry: Office supplies expense .............................................................................................. 1,800 Cash ......................................................................................................................... 1,800 b. On the last day of 2015, Midwest Importers received a $90,000 prepayment from a tenant for 2016 rent of a building. Midwest recorded the receipt as rent revenue. c. At the end of 2015, Dinkins-Lowery Corporation failed to accrue interest of $8,000 on a note receivable. At the beginning of 2016, when the company received the cash, it was recorded as interest revenue. Required: For each error: 1. What would be the effect of each error on the income statement and the balance sheet in…